China’s GDP grew by 6.8% to US$6,263 bn in H1 2018

The gross domestic product (GDP) of China was 41,896.1 billion yuan (US$6,262.90 bn) in the first half year of 2018, a year-on-year increase of 6.8% at comparable prices, according to the preliminary estimates of National Bureau of Statistics of China.

Specifically, the year-on-year growth was 6.8% for Q1 2018, and 6.7% for Q2 2018, staying within the range between 6.7% and 6.9% for 12 quarters consecutively.

The value added of the primary industry was 2,208.7 billion yuan (US$330.17 bn), up by 3.2% year-on-year; the secondary industry 16,929.9 billion yuan (US$2,530.79 bn), up by 6.1%; and the tertiary industry 22,757.6 billion yuan (US$3,401.95 bn), up by 7.6%.

Agricultural Production was Sound.

The output of pork, beef, mutton, and poultry was 39.95 million tons, a year-on-year growth of 0.9%, among which the output of pork was 26.14 million tons, up by 1.4%. The number of pigs registered was 409.04 million, a year-on-year decrease of 1.8% and that of pigs slaughtered 334.22 million, a year-on-year growth of 1.2%.

The Industrial Production was Generally Stable.

The real growth rate of total value added of the industrial enterprises above the designated size was 6.7% year-on-year, 0.1 percentage point lower than Q1 2018.

An analysis by types of ownership showed that the value added of the state holding enterprises went up by 7.6% year-on-year; collective enterprises down by 1.9%; share-holding enterprises up by 6.7%; and enterprises funded by foreign investors or investors from Hong Kong, Macao, and Taiwan up by 6.2%.

In terms of sectors, the value added of the mining grew by 1.6% on a year-on-year base, the manufacturing grew by 6.9% and the production and supply of electricity, thermal power, gas, and water grew by 10.5%.

The value added of high-tech industry and equipment manufacturing industry grew by 11.6% and 9.2% year-on-year respectively, 4.9 percentage points and 2.5 percentage points higher than that of the industrial enterprises above the designated size as a whole.

In June, the total value added of the industrial enterprises above the designated size went up by 6.0% year-on-year. In the first five months of 2018, the total profits made by industrial enterprises above the designated size was 2,729.8 billion yuan (US$408.07 bn), up by 16.5% year-on-year.

The profit rate from principal businesses of industrial enterprises above the designated size was 6.36%, 0.35 percentage point higher than that of the same period last year.

The Index of Services Production increased by 8.0% year-on-year, 0.1 percentage point lower than Q1 2018, maintaining high growth rates. Specifically, information transmission, software and information technology services, rental and business services maintained high growth rates.

In June, the Index of Services Production increased by 8.0% year-on-year. In the first five months, the business revenue of service enterprises above the designated size grew by 13.3% year-on-year, 0.2 percentage point higher than the same period last year.

Specifically, the business revenue of strategic emerging services, science and technology services, and high-tech services grew by 18.1%, 17.5% and 15.4% respectively, 2.4 percentage points, 5.0 percentage points, and 4.5 percentage points higher than that of the same period last year.

The Growth of Consumer Consumption and Market Sales was Stable and the Growth of Upgraded Consumer Goods was Fast.

The national per capita consumption expenditure was 9,609 yuan (US$1,436.41), a nominal growth of 8.8% year-on-year, 1.2 percentage points higher than that of Q1 2018, or a real growth of 6.7% after deducting price factors, up by 1.3 percentage points.

The nominal growth of per capita consumption expenditure of urban households was 6.8%, up by 1.1 percentage points. The nominal growth of per capita consumption expenditure of rural households was 12.2%, up by 1.2 percentage points.

In the first half year, the total retail sales of consumer goods reached 18,001.8 billion yuan (US$2,691.02 bn), a year-on-year increase of 9.4%, 0.4 percentage point lower than Q1.

Analyzed by different areas, the retail sales in urban areas reached 15,409.1 billion yuan (US$2,303.45 bn), up by 9.2%, and the retail sales in rural areas stood at 2,592.7 billion yuan (US$387.57 bn), up by 10.5%.

Grouped by consumption patterns, the income of catering was 1,945.7 billion yuan (US$290.86 bn), up by 9.9%; and the retail sales of goods were 16,056.1 billion yuan (US$2,400.17 bn), up by 9.3%.

The sales of upgraded consumer goods grew fast. The retail sales of enterprises above the designated size of household appliances and audio-video equipment, communication equipment and cosmetics went up by 10.6%, 10.6%, and 14.2% respectively, 0.2 percentage point, 0.5 percentage point and 2.9 percentage points higher than the same period last year. In June, the total retail sales of consumer goods rose by 9.0% year-on-year, 0.5 percentage point higher than last month.

The Growth of Investment in Fixed Assets was Stable and Private Investment and Manufacturing Investment Rebound.

Specifically, the private investment reached 18,453.9 billion yuan (US$2,758.61 bn), up by 8.4% year-on-year, 1.2 percentage points higher than the same period of last year.

The investment in the primary industry increased by 13.5%; the secondary industry was up by 3.8%, among which the investment in manufacturing was up by 6.8%, achieving growth for the third consecutive month, 3.0 percentage points higher than Q1 2018, or 1.3 percentage points higher than the same period of last year; the tertiary industry grew by 6.8%, among which the investment in infrastructure was up by 7.3%.

The investment in the high-tech manufacturing industry increased by 13.1%, 7.1 percentage points higher than the total investment.

The investment in real estate development in the half year was 5,553.1 billion yuan (US$830.11 bn), a year-on-year growth of 9.7%. The floor space of commercial buildings sold was 771.43 million square meters, up by 3.3%. The sales of commercial buildings totaled 6,694.5 billion yuan (US$1,000.74 bn), up by 13.2%.

The Surplus of Imports and Exports of Goods was Narrowed and the Trade Structure Continued to be Improved.

The total value of imports and exports of goods was 14,122.7 billion yuan (US$2,111.15 bn), an increase of 7.9% year-on-year. The total value of exports was 7,512.0 billion yuan (US$1,122.94 bn), up by 4.9%; the total value of imports was 6,610.7 billion yuan (US$988.21 bn), an increase of 11.5%. The trade balance was 901.3 billion yuan (US$134.73 bn) in surplus, 26.7% less than the same period of last year.

The trade structure was further improved. The import and export of general trade increased by 12.2%, accounting for 59% of the total value of the imports and exports, an increase of 2.3 percentage points compared with the same period of last year. The export of mechanical and electronic products increased by 7%, accounting for 58.6% of the total value of exports.

The imports and exports with the top three trade partners continued to grow. Specifically, the imports and exports with European Union, United States, and ASEAN went up by 5.3%, 5.2% and 11% respectively, which combined to make up 41% of the total value of imports and exports.

During the same period, the imports and exports with 16 Central and Eastern European countries increased by 14.7%, 6.8 percentage points higher than the growth rate of the total value of imports and exports.

In June, the total value of imports and exports was 2,493.6 billion yuan (US$372.76 bn), a year-on-year increase of 4.3%. Specifically, the total value of exports was 1,377.7 billion yuan (US$205.95), up by 3.1%, and the total value of imports was 1,115.8 billion yuan (US$166.8 bn), up by 6.0%.

The Resident Income Grew Steadily and Employment was Good and Stable.

The national per capita disposable income was 14,063 yuan (US$2,102.23), a nominal growth of 8.7% year-on-year, or a real increase of 6.6% after deducting price factors.

In terms of permanent residence, the per capita disposable income of urban households was 19,770 yuan, a nominal growth of 7.9% year-on-year, or a real growth of 5.8% after deducting price factors.

The per capita disposable income of rural households was 7,142 yuan (US$1067.63), a nominal growth of 8.8% year-on-year, up by 6.8% after deducting price factors. The per capita income of urban households was 2.77 times that of the rural households, 0.02 less than the same period of last year. The median of the national disposal income was 12,186 yuan (US$1821.64), a nominal increase of 8.4% year-on-year.

In June, the surveyed unemployment rate in urban areas was 4.8%, the same as that of last month, or 0.1 percentage point lower than the same month of last year. The urban surveyed unemployment rate in 31 major cities was 4.7%, the same as last month and 0.2 percentage point lower than the same period of last year.

By the end of Q2 2018, the number of rural migrant workers reached 180.22 million, 1.49 million more than the same period of last year, an increase of 0.8%. The average monthly income of migrant workers was 3,661 yuan, a year-on-year growth of 7.5%.

The Consumer Price Rose Mildly and the Price of Industrial Products Rose Steadily.

The consumer price went up by 2.0% year-on-year, 0.1 percentage point lower than Q1 2018.

Grouped by commodity categories, prices for food, tobacco, and alcohol went up by 1.4% year-on-year; clothing up by 1.1%; housing up by 2.3%; articles and services for daily use up by 1.6%; transportation and communication up by 1.2%; education, culture and recreation up by 2.1%; medical services and health care up by 5.5%; other articles and services up by 1.1%.

In June, the consumer price was up by 1.9% year-on-year, 0.1 percentage point higher than May and down by 0.1% month-on-month. In the first half year, the producer prices for industrial products went up by 3.9% year-on-year, 0.2 percentage point higher than Q1 2018; the purchasing prices for industrial producers were up by 4.4% year-on-year.

In June, the producer prices for industrial products went up by 4.7% year-on-year, 0.6 percentage point higher than last month, and a month-on-month increase of 0.3%; the purchasing prices for industrial producers were up by 5.1% year-on-year, or an increase of 0.4% month-on-month.

Economic Restructuring and Upgrading Achieved Notable Results and the Growth of New Driving Forces Accelerated.

An analysis by industrial structures shows that the growth rate of the value added of the tertiary industry was 1.5 percentage points higher than that of the secondary industry, accounting for 54.3% of the GDP, which was 0.3 percentage point higher than that of the same period last year and 13.9 percentage points higher than that of the secondary industry.

Analyzed by demand structures, the final consumption expenditure’s contribution to the economic growth reached 78.5%, 47.1 percentage points higher than the total capital formation.

New industries and new products grew rapidly. Analyzed by the structure of industrial sectors, the value added of industrial strategic and emerging industry grew by 8.7% year-on-year, 2.0 percentage points higher than that of the industrial enterprises above the designated size. The production of new energy vehicles was up by 88.1% year-on-year, industrial robots up by 23.9% and integrated circuits up by 15.0%.

New Consumption was booming. Analyzed by trade structure, the online retail sales reached 4,081.0 billion yuan (US$610.05 bn) in the first half year, a year-on-year growth of 30.1%.

Specifically, the online retail sales of physical goods were 3,127.7 billion yuan (US$467.55 bn), an increase of 29.8%, accounting for 17.4% of the total retail sales of consumer goods, up by 3.6 percentage points year-on-year; the online retail sales of non-physical goods was 953.3 billion yuan (US$142.51 bn), an increase of 30.9%.

Green development was moving forward steadily. In terms of energy conservation and emission reduction, the energy consumption per unit of GDP was down by 3.2% year-on-year in the first half year.

The Supply-Side Structural Reform was Deepened and the Expectation of the Market was Positive.

The industrial capacity utilization rate nationwide was 76.7%, 0.2 percentage point higher than Q1 2018, and 0.3 percentage point higher than the same period of last year.

The efforts to reduce inventory made remarkable achievement. By the end of June, the floor space of commercial buildings for sale has dropped by 14.7% year-on-year.

The Corporate leverage ratio and cost continued to decrease. At the end of May, the asset-liability ratio of the industrial enterprises above the designated size was 56.6%, a year-on-year decrease of 0.6 percentage point.

For the first five months, the cost for per-hundred-yuan turnover of principal business of the industrial enterprises above the designated size was 84.49 yuan, 0.31 yuan less year on year.

The investment in weak areas grew rapidly. In the first half year, the investment in the management of ecological protection and treatment of environmental pollution and the investment in agriculture increased by 35.4% and 15.4% year-on-year respectively, or 29.4 percentage points and 9.4 percentage points higher than the total investment respectively.

The market expectation stayed positive. In June, the PMI Composite Output Index was 54.4%, the Manufacturing Purchasing Managers’ Index was 51.5% and the Business Activity Index for Non-Manufacturing Industries was 55.0%, continuing to perform within the expansion range.